hello and welcome to "worldwide exchange." i'm kelly evans. resources are underperforming amid concerns. shares of apple suppliers tumbled. and voting on the next italian president gets under way in rome with berlusconi and bersani apparently backing the same candidate. rifts in the upper left could jeopardize the process. and we're live in moscow amid rumors of division in the kremlin. we'll speak with the former president of the czech republic in the next 15 minutes. welcome to "worldwide exchange" this morning. plenty going on in the program. we also want to draw your attention first and foremost to the continuing issues across the commodity complex, one where gold has gotten the lion's share of attention. but others, whether it's industrial metales and crude are participating today. a rebound shaping up, but not the case for copper, dr. copper down better than 1%, 1.2%, in fact. and that is spurring a sell-off in the shares of a lot of the minors. new crest among those heavily to the downside in some cases. fortescue down nearly 8%.

rio and bhp have recovered a little bit as we move through the trading session. and it's not just the big names, two smaller names were getting a hit. australian producers particularly hit hard. gold, major new crest and fortescue. project values down since last summer. now, as rescue mega projects come under pressure, bhp billiton is reshaping its top ranks. mckenzie's leadership team indicates some key executives who worked closely with coprous. and in a cost-conscious move, the new ceo's annual base rally has been trimmed to just $1.7 million. turning now to italy, the parliament has begun the process to vote for a successor to current president george

nepolita on who current terms ends on may 15th. we have been investigating the process, a difficult one and the candidate. >> six weeks after its inconclusive elections, italy remains without a government. hopes that the main parties would form a grand coalition have been dashed by political squabbling. they talk about coalitions, they are finished. the story is finished. another story will start. why do you continue with this talk of coalition? >> attention now has turned to the election for successor george nepal ton know, whose term ends on may 15th. whoever takes over will have the key task of trying again to form a coalition or call fresh elections. so the president is chosen by an electoral college comprised of all national lawmakers and some regional representatives. to win any of the first three rounds, a candidate has to win two-thirds of the potential vote. from the fourth round on, an absolute majority is enough for victory. here are some of the suggested candidates. the five-star movement are

backing left wing spishan stephaneo berdosa. many would back romano prodi. but prodi does not win berlusco berlusconi's report. the one candidate who appears to have united both berlusconi and bersani is former senate speaker franco marini. analysts say that if the president is elected in the first round, they would stand a good chance of helping to form a grand coalition. but if the final candidate fails to get enough backing from both the democrats and the people of freedom party, a coalition would be off the cards. the new president would be forced to dissolve parliament and call new elections. kelly, back to you. >> okay. i think i followed that. tom, thanks very much. a complicated process as it has for a while been in italy.

let's get more from anilisa. there's a general view in markets that amoto would be the most friendly candidate here. what is your take? >> well, probably from what we have seen from the press in the last couple of days, amoto and amini is one of the sectors of the major italian union would be the most market friendly president of the italian republic. in a way, both candidates would be supported by both berlusco berlusconi's party and the pd. and they have like a kind of background that they could -- which is in a way neutral and would have probably the creation of a government that could lead to a substantial change in the italian -- which is what the country at the moment needs the most. >> perhaps today what we're looking for is just the sense that there is going to be an

outcome to these votes because the longer it drags on, the less and less likely it seems we're going to get a clear candidacy. >> i'm sorry, i can't hear you. >> it looks as though the most important thing from a market point of view is actually that we get some sense of an outcome and that we don't necessarily have to go to round after round of votes. >> the vote for the new president, especially if it would be elected within the first three ballots is very important because it leads the way to the creation of a grand coalition government. a grand coalition government could lead to an electoral low change and, you know, eventually borrow some time before italy goes back to the election probably in early 2014. this is probably the best case scenario because, you know, if the president of the republic is supported by both major

coalition, we've seen some of these centers on the pd for the supports of marini. the possibility that there will be some change in the electoral law, in the expanse public sector and for the italian politics and some changes in terms of structural reforms that could carry over until the beginning of next year. while obviously it's not the ideal scenario overall, because italy needs something more than just a little changes here and there, but that would be the first step in the right direction. >> right. and as annalisa says, futures could cause near term volatility. thanks very much. she's a senior economist at new edge. speaking of tumultuous, russia's president is coming under

controver controversy. while russia's economy hadn't performed badly last year, falling commodity prices risk pushing the country into recession. these comments come just hours after president putin threatened to fire officials for not following his orders on public spending. geoff cutmore is outside this event. what are you hearing about these concerns and the russian economy overnight? >> reporter: absolutely. fascinating issue. we clearly see some risks emerging in the russian government at this point. and i just want to put that issue to one side for a moment. because i have with me li jiaoung. he is a former chinese minister. i'm fortunate to get the opportunity to talk to him at this event. thanks very much for speaking to me. if i could just start off by asking you, clearly, the world has been focused on the terrorist events in boston and

this tragic, very un pleasaplea event. i wonder if you could dwifs a perspective from the chinese point of view here because nobody wants to see terrorism and in particular i think the chinese have an interesting perspective on this. i wonder if you could help us out. >> i know too well china has been always clear cut -- all forms of international terrorism. and for many years and -- china has been -- this time, our leaders have expressed our sympathies to the american leadership and my young colleague, china has sent a message -- >> increasingly, it seems that washington and beijing are

managing to find accord on many issues. you stand shoulder to shoulder on the question of terrorism, it would seem. north korea, also, now there seems to be a break through in terms of beijing's view and washington's view. is china doing enough to put pressure on pyongyang to step back from the edge? >> i believe the only effectual way to resolve the issue on that in particular is to create the condition, resume the six-party talks, and among six parties, america and tprk have a key role to play. >> so the solution must come from america or the solution must come from north korea? >> both. there are two sides.

because of xlaping about the military exercises, and america is complaining about north korea's behavior or tprk's behavior. this is very clear. so i believe the people of the world, the people in that part of the world love peace. we help spread the conditions to resume the six-party talks. that would help to realize peace and stability. that would be beneficial to all parties and the people of the world at large. i really have to go. just stay with me. he just need to finish off. there is a question about the chinese continuing to supply aid to north korea. is the answer not to -- >> the most important thing is

for all parties, including your country, to abide by the general principals ensliebed in the u.n. charter. china has shown that it is sincere on this. i hope other countries will follow the example of china. if all countries are treating othe others, the world will enjoy march more stability and peace. >> it doesn't matter what i think. it matters what you think. >> your thinking matters a lot. i know. this is -- news does not have a

national pondering, but a correspondent should have conscious. >> well, clearly, but i'm asking, do you think -- >> no, i'm also asking you what you position on this. >> well, no one is interested what i think. you're the former foreign minister, so you have the insight, sir. >> no, i -- >> if i was a former minister, they would be interested in me. >> i believe i am of the majority of the people and you are the correspondent and the correspondent of a big media. you should do your job to let the world have more justice and more rationale larger view. >> so let me ask you, do you think, then, that there will not be more conflict on the -- >> what have you done, for

example, to create the condition for resuming the six-party talks? have you done anything? to that effect? >> well, that's what i'm asking you because i'm trying to understand the situation of china's position related to north -- >> china's position is well known. the young foreign minister, the new foreign minister has made everything clear. have you read that? >> yes. >> did you report it? >> yes, of course. >> and you reported that objectively? >> of course we reported it as a fact. >> that's good. i'm happy. >> but the point is, you understand the nuances of the relationships that are unfolding at the moment. that's why i'm asking you, sir. >> i have shares already clearly expressed by the young minister. one of my successor's successor. >> so we can sleep comfortably in our beds at night knowing that this is not going to be a

serious concentration on the north korean border? >> again, you have every lot of freedom to dream by yourself, but i suggest as a correspondent you could also -- to have, to create the conditions for the people on the peninsula and the people in neighboring areas to enjoy stability to sleep as well as you do, to dream as beautifully as you do. >> sir, cnbc will report the facts as they are. that's all we do. >> i only hope you report things objectively. >> of course. >> honestly. >> of course. >> and also to persuade all parties to work for peace, not the only way around. >> let's hope we can step back from the edge. it's been a pleasure speaking to you. i know you have a lunch to rush away to.

let's me relieve you of your microphone and you can get away for that. >> even correspondents need to feed themselves. >> thank you. sir, thanks very much, indeed. thank you. we'll see you next time. there you go. a fascinating conversation with li xoiushang, former minister of china. clearly from the nature of the responses to the questions being asked, this is a hot issue when it comes to beijing as it is for the rest of the world here, kelly. i think we all want to know what the next steps are in this north korean story. but the message being, listen to what the chinese are saying. they also want the six-party conversation to go well at this stage. let me send it back to you in london. >> geoff, we do hope you are working for peace over there and watching your appetite, as well. thank you very much for that, geoff cutmore. now, the fbi has criticized media outlets for misreporting

that a suspect was arrested over monday's bombings of the boston marathon. the fbi issued a statement saying they're asking media to exercise caution and went on to say they have video of someone dropping a suspicious bag but have not identified the individual yet. chris pallone joins us now from boston. chris, last night, much confusion. can you remind us this morning, where do we stand? is there a suspect in custody? >> yeah, hey, kelly, no, absolutely not. that's one thing that pete williams from nbc news was insistent all the way through, that his law enforcement sources, which, of course, are impeccable were saying that there was not a suspect in custody. what was going on yesterday and what continues to go on today is that authorities have pored through the video and pictures have been coming in over the last three days trying to pinpoint exactly where those two packages were placed before they went off. now, authorities do acknowledge

to nbc news that they have identified by sight a person who is seen placing either a backpack or a duffel bag on to the ground in the place where the second bomb went off in the moments leading up to that explosion. however, according to nbc news, that person has not been identified by name. they just see him on the tape and are working to identify him. he certainly has not been arrested or put into custody. police continue their work today to try to figure out exactly who that person is. last night, the fbi was planning to have one of their twice daily media briefings around 8:00 local time. that was canceled. and so we're hoping to hear more information today, perhaps the fbi will put out a picture to try and get the public's health if they are not able to identify who that person is. we're also seeing from police today some video of the implements that were used,

nylon, black bag that were used to carry these pressure cookers and, of course, we're expecting the president to come to boston today along with the first lady for an interface prayer vigil. a lot going on in boston today with this investigation, kelly. >> that's right. chris pallone again following it for us. we'll be back with you in the next couple of minutes for the latest in that situation. also, paul kevin curtis has been identified as being tied to the ricin letters with his infamous signoff, i am kc, and i approve this message. a few suspicious packages still remain on capitol hill which have not yet been tied to curtis. and another tragedy in the u.s. last night, a blast went off at a fertilizer plant in west, texas. the department of safety reports about 100 injuries and many confirmed fatalities. significant damage was reported to structures several blocks

away, including 50 to 75 homes. the blast was reportly heard more than 45 miles away. texas governor rick perry said the investigation is ongoing and is they're gathering information. terrible. apple shares dropped to a 16-month low amissed concerns over suppliers. we'll have an analysis of that situation at 10:30 cet. coming up on the program, italy's lawmakers are continuing to vote for the new president. stay tuned and we'll bring the latest information out of italy. morgan stanley takes its turn on reporting today. we'll have expert analysis out of cincinnati. and president putin threatening to fire ministers for failing to support the faltering russian economy. geoff cutmore is still live at the 2013 russian forum. he'll speak with the former president of the czech republic when we come back.

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welcome back to the program. here is a look at how stock res trading, to the up side. we are seeing increases throughout the trading session. yesterday was a different story. we started out okay and rapidly

sold off. germany in particular was weak. eegan jones did dowde country to an a from an a plus. the xetra dax today after shedding better than 2% yesterday, which is a huge move for this index, rebounding by about 0.4%. small gains seen elsewhere, the ftse mib in italy up about 0.6%. keeping an eye on the presidential election process. that is currently under way. here is a look at the bond space. when it comes to the ten-year rates, we're also seeing a similar story with the one exception of germany. so generally speaking, risk sentiment doing okay this morning. yields falling to 4.65%. 4.23% respectively. we've been sitting at these levels for weeks now. the german bund selling off just a bit.

extraordinary. i want to show you the spanish curve. we've got the ten-year -- it doesn't look quite right. let's check these levels and we'll get back to you on the spanish curve. here is what's happening across forex in the meantime. the euro/dollar is slightly firmer, up about 0.1%. the australian dollar is rallying. this is important, as well. we are seeing commodity complex still under pressure, especially copper and especially some of the equity names. the aussie/dollar firmer by about 0.2%. the dollar/yen is giving up a little bit. it is holding the 98 level, down by just a little bit. the question becomes important going forward for a lot of traders who have been bidding up the nikkei whether the bank of japan can continue to deliver. today, they did say they'll increase their frequency in the market.

for more on that, let's get the latest from li sixuan out of singapore. >> hi, kelly. the shanghai composite bucked the down trend to end higher bay modest 0.2% on the back of the fdi data helped by stronger inflows into services and manufacturing sectors. positive earningsf china lifted mainland automakers. meantime, property developers ebbed on a mixed note while average home prices continue to accelerate in march before new curves take effect. the weakness in mainland xhotty plays brought the hang seng lower by 0.25% extending a five-day losing streak. elsewhere, the apple sell-off, in fact, still very much in play. pessimism over the future demand for apple products weighed on some of the tech heavy asian markets with suppliers taking a hit in taiwan, south korea, and also japan. thailand lost 1.3% today and

apple's major flat screen supplier tanked nearly 5%. apple linked stocks in japan shredded some 2.4%. the nikkei closed down 1.2%. down under, as kelly just mentioned, we saw a brutal sell-off in resources stocks with the asx 200 slipping 1.6%. and india's sensex yet again bucking the down trend and outperforming its asian peers trading higher by 0.7%. back to you. >> thanks very much for that. a supplier story for apple is an important one. we'll have more on that later in the program. first, some news out of the eurozone, where portugal is saying it's going to be able to raise funds by cutting spending elsewhere in order to maintain the market. let's get you the latest flash. it's going to press forward with cuts that affect spending on personnel, goods, services and other current spending, allowing

the country to meet its 5.5% deficit target for 2013. this follows parliament voting down other measures, throwing the country's needed fund-raising into doubt and raising concern more broadly about the eurozone. but now it looks as though spending cuts compensate for the austerity measures that were rejected by the court are going forward. so perhaps providing some relief to those worried that this would throw the eurozone's progress into doubt. not a major move on the back of that news. straight ahead on "worldwide exchange," uk retail sales figures for march will hit the tape in just a couple minutes' time. we'll break down those numbers for you live. plus, strong first quarter results. can they maintain their edge?

welcome back tos with was. these are your headlines. stocks in europe recovering from the worst day in nine months. performance from basic resources amid concern about declining commodity prices spp fear of falling demand for iphones and ipads is veding to asia where shares of apple suppliers

itemeled. and voting on the next italian president gets under way in rome with bersani and berlusconi backing the same candidate. plus, we're live at the russian forum in moscow amid rumors of divisions . first, the market has been waiting on uk march retail sales figures. those are now out and they show a decline of 0.7% on the month versus the forecast of 0.4%. you can see sterling weakening on the back of that. that leaves them down about 0.5% on the year. for the quarter as a whole, we are seeing a decline in the fourth quarter. nonetheless, a somewhat softer than expected report. many saying sterling looking comfortable. it's been punching above its weight i think is how citigroup

put it. still, not a major move this morning. it's just slightly negative. let's look across the rest of the forex space. sterling/dollar is somewhat weaker. the euro/dollar adding about 0.1% there. portugal saying it will go ahead and compensate with the austerity measures. the dollar/yen, roughly flat at 98 and the aussie/dollar is rallying, despite the concern about commodities. here is what's happening across the bond space. we're waiting on the spanish debt auction that should be out in a couple minutes' time. yesterday's auction went off quite smoothly with yields at some of their lowest levels in a couple of years. meanwhile, italy is seeing its yields fall, as well. japan, too, under 0.6% for that ten-year. if you think it's low for germany at 1.2%, take a look at the japanese yield. spanish bonds, here is a look at the curve. 4.65% on the ten-year. the two-year looking just over 2706%.

we'll update that after the release of those results. now, russian prime minister dmeet re-medvedev is defending his economic report amid fears that falling prices could push the economy into recession. this as president putin is stepping up pressure on his long-term ally. geoff cutmore is at the russian forum taking place in moscow. as i said earlier, this is a good time to be there. i'd love to know, in fact, how much people are making of this rift. >> it's fascinating. i mean, this story about growth and about declining commodity prices, it just comes in the middle of what is a perfect storm for the eurozone and the european land mass at large. you want to try and get a handle on just where we go next. there are many competing voices in this story, not least that of vaklav clause, president of the czech republic until about six weeks ago who is now with me at our position. and a noted euro skeptic, i

guess i should put out there. and your book says the shattering of illusions, europe. just explain to us what you think needs to happen next after the cypriot crisis to move this story in the right direction. >> well, i look for a correct label. there are no euro skeptics. i think i am a euro rally opposing people who are euro-nighted. that is my preference for such labels. you know, cyprus was just another example, one after anoth another, demonstrations how infunctioning is eurozone is. simply, europe made a tragic mistake by introducing the one single currency for such a heterogeneous group of 17 countries. there is no way out of it.

so i wouldn't blame greece, i wouldn't blame cyprus. i think they are victims of the eurozone system. they didn't create the eurozone problems. they made just one mistake. they made the mistake by entering the eurozone. they could have lived without the eurozone for decades and now they are in trouble. >> but the policy approach seems to be this union must be saved at all costs, even if it means we go in and appropriate the savings of wealthy investors in these banks. >> it is simply my view. simply, i know that the current politicians in brussels and around simply want to continue the same policy at whatever cost. who will pay those costs is quite evident. not to the those politicians themselves. it will be paid by the citizens living in europe and the

economic stagnation. i know people speak more often about the fiscal transfer, how much goes to cyprus. that is not the most important thing. much more important is the loss of economic growth. that's the reality. >> it seems to me that policy is not going to change until there appears on the horizon credible opposition to the existing political set up in europe. so we have elections in germany. germany very much calls the shot. do you think new parties like the asd who are opposing the current system stand a chance of changing the direction? >> well, i am not in political forecaster for germany. simply, i don't know the real support of this new party. nevertheless, i fully agree with the political stances of this party. i know some of their ex

importants and we are speaking from various occasions together. so i think this is a necessary future for the euro because the change cannot be orchestrate ed from above. the change must come from below and it must come in a normal political discourse, in a normal political interplay of parties in individual countries. and this is a good example to start. >> if angela merkel wins in germany, nothing changes? is that your analysis of the situation? >> well, i -- you mean the -- >> the election in september, if angela merkel is returned in september, nothing changes? >> i -- when she continues, i don't see any changes. my conviction, i know her quite well and i know some people around her, like the minister of finance. >> you, when you were in power,

led relatively conservative economic manifesto, you were criticize at some points for more not privatizing more quickly. but let me ask you this, growth is the problem now for europe, not just the political status quo. how do we get growth back to those economies of peripheral europe without getting the ecb just to open the spigotes and spend money? >> i was yesterday attending the margaret thatcher funeral in london. i have to say that i am repeating permanently that my great hero margaret modelled, margaret thatcher succeeded in privatizing three, four firms a year and we've been forced to privatize three or four firms per hour. but speaking about growth, there are some political situation.

i'm afraid this is interconnected in respect is no way to -- economic growth without throwing the political issues in in europe. >> and that means what here, that we just shut down the banks that have accepted debt? is that we force governments into mass layoffs because of their overspending? and we take the sharp pain now and accept it -- >> i would recommend something of being -- introducing a -- misnomer. we have never done anything right. nevertheless, i must say that the european politicians must stop their indecision and they must do something. but it doesn't mean centralize more europe. on the contrary, they must do the opposite. they must increase their individual member states. >> it's been a pleasure catching up with you.

and best of luck for your life outside of the government now. >> thank you very much. another couple fascinating interviews to come here. we're going to talk with herman greck of the sperr bank. and, of course, mark mobius from templeton, we have one of the ee memorying markets even before the bric phrase wag coined. we'll find out where he thinks you can make money. >> geoff, thank you so much. we know mark mobius was saying, we have more than a billion dollars in equity in usual russia. we want this to work. moving on, u.s. authorities have yet to uncover the battery problems in the boeing 787.. but japanese airlines soaring on reports the fleet could be ready for takeoff sooner than spec'd. yukako joins us now with the nikkei report. >> hi, kelly.

while the market tumbled in tokyo today, shares in the top two airline operators surged on reports that boeing 787 dreamliners could be back in the sky as early as june. news that operations were starting times for the summer vacation season saw shares in nipo airways soar over 3%. the nikkei reported that the u.s. federal aviation administration is to give flight approval to boeing by tend of this month. and japanese regulators are to follow. after repairs, ana will resume flights from june 1st and international flights in summer. jal, which only operates the dreamliner on international routes is looking to resume operations in june. 787 jets were grounded in mid january due to battery overheating and this led to more than a total of 4,300 flight cancellations at the two

japanese airlines. now, shares in gsu, the supplier of the lithium ion batteries gained by more than 5%. transportation authorities in both the u.s. and japan have not yet managed to fully determine what was wrong with the batteries and investigations are to continue. that's all from nikkei business report. back to you, kelly. thank you very much for that. we're just getting the results out of spain for its latest debt auction, waiting for the yields to come through, but so far, they've sold about three -- just under 3 billion euros worth of the 2023 and 2016 bonds. add another 2 billion for the 2018 and that should put it just around the $5 billion mark. it looks as though the bid to cover in the case of the 2018, down from the last auction, but in the case of the three year up. you can look there at the reaction across the curve. we're seeing a rally in the ten-year, 4.65%.

the total for the 2018 bond looks as though it's come through at a yield of just under 3.3% versus 3.6% on march 211th. so another decline there, at least when it comes to the five-year paper. we can expect probably a similar story for the others, as well. even though that five-year bid to cover ratio came in at about 2.5 versus 3.5 the last time around. apple shares are moving higher in extended trade following an in-session decline that saw them dip below the $400 mark for the first time since december 2011. the tumble, sparked by a decline in sales. apple is due to release quarterly results next week. there is concern, of course, the numbers may be underwomening and that concern is spreading across asia. investors dumping iphone and ipad componentmakers.

you can see largan down by better than % and lg down 4.79%. despite all of this and waning pc demand, taiwan's top contract chipmaker reporting solid first quarter werings. profit at taiwan's semi conductor manufacturing beat estimates on the year. tsmc plans to boost spending, as well. let's hear more now from william john. he joins us on the line. he's head of taiwan research at ubs. thank you so much for your time. is tsml delusional or are they right to think they can do well in a market where apple is suffering? >> i think they have an advantage. one is there's probably a certain degree of inventory building as coming through. and on the other hand, i think

it is probably gaining a bit of market share. it's an overall perspective, i think it certainly does have its advantages. >> and dow sort of sympathize with the view here that this is now become ago story that's more about the strugglings of apple and those particular suppliers to the country as opposed to the sector at large? >> well, i think in general, i do think that the overall food chain or supply chain in taiwan are still waiting for some type of seasonal build. some of the new product introductions and some of the rebuilds are coming through more in the q3 time frame. in the q1 and q2 quarter, we're not seeing a lot of seasonal pick up. but other than that, i think the food chain checks suggest things are still looking quite muted. our expectation is for initial early sign sometime by june and we should get a bit more momentum going into july and august, at which point in time i

think the markets will probably improve. >> and what about a couple of these major changes happening, for example, in the smartphone industry where it looks like the next wave. and this is since the talks in barcelona. the next wave is basically going to be lower end, targeting the emerging market. where does that leave the chipmakers? what's the story here? are they as attractive now as they might have been five or seven years ago? >> basically, the trend looking ahead is this move to mid to lower end hand sets and the volume growth is what everyone is counting on. so in that case, i think a lot of componentmakers are hoping that volume growth will offset the pressure decline and actually lead to higher margins or higher bottom line. it is still unclear at this point who will benefit and who will be the losers. we think componentmakers are better positioned given that they're better to defend their pricing rather than sort of the

assemblymakers. >> and if it's not going to be apple in the market leader now. william dong, thank you very much, head of taiwan research at ubs. strayed ahead, we're going to take a look at how the rise ing emerging food demand and how to invest around it. welcnew york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

shares of nestle are lower. down 1.3%. carolin has more out of zurich. hi, carolin. >> good morning, kelly. take a look at the smi, which is underperforming the rest of europe. that is because nestle has a 25% waiting on the smi. nestle up 1.3% on the back of this miss in terms of first quarter sales. organic growth, this is the key metric that we always look at at 4.3%. this is the slowest first quarter sales growth in four years. and it is a big surprise, given that its rival earlier this week showed organic growth more than 5% and that was a big positive splice. so many analysts this morning scrunching their heads. but let's take a look at some of the factors that negatively

impacted nestle's first quarter numbers. you've got the long winter and that very much negatively impacted the water concerns. momentum is europe is really coming to a stand still with mature markets up 0.9%. and let's not forget emerging markets, this is where nestle arrived from 4% to 3%. growth in the emerging markets dropping to single digits. remember, there is still a low double digit growth territory last year, so we're seeing the momentum slowing there, as well. >> carolin, we'll have more on this issue with our next guest. another story to put to you, we're curious about syngenta. better than expected first quarter sales, i think reiterated that tracks meet at 2020 gold of $25 billion in sales. and carolin, that's a pretty big

move for syngenta. >> yeah. and i'm surprised by that. numbers were a tad better than forecast. keep in mind that syngenta has taken part in the rally since the beginning of the year. a strong end to the latin growing season. but because of the longer or harsher than expected season in northern europe, planting was delayed somewhat. the cfo saying it could be another report year. >> carolin, thanks so much. we want to stick with the theme about emerging markets and the food demand. rise in the class is expected to

lead to a larger demand for food. joining me now is jose martin. you've got 11 way toes play this theme, not ten? >> well, what we did was asked analysts across the geography, what was the best way to play the theme? we leave the choice of stocks to their own individual decision making. our consumer analyst in india thinks they're overvalued. in this group of 11, it's a celebrated stock. >> and this basically being the emergence of the consumer in emerging markets. is it a wealthier consumer? >> it's not just that. the world, n in the next 40 years, will need 70% to 100% more food. on one side, we were supposed to produce food enough to feed 7 billion people, but we don't. on the other side, every single bit of growth that comes from

the requirement comes from this wealth effect. now, you couple that with what's the emerging market economies represent today in the world economies, which is a third, and it will be half the world economy in five years. >> and you can see this is a major theme. you guys have highlighted several companies from inbev to nestle that are ways to play it the.but i wonder, fen, even if you buy it long-term, wa do you do when you have a nestle market. >> nestle is a neutral rated stock at our fist. that's why nestle india is a accelerated stock. but the food producers in brazil, it's a buy rated stock and it's the way to play it. even on the fertilizer angle, we don't cover syngenta. we cover other companies that do

fertilizers, the feeding and the agra technology, which is helpful to extract more from the existing land that has very little potential to grow. >> were there any other surprising ways you can play the theme without necessarily buying some of the foodmakers? >> for me, the most exciting opportunity here, and it's large and in size, the top ten producers sell roughly $40 billion. the top ten food retailers in the world sell $1 trillion. the only companies that know exactly day by day what you want to buy are the food resale companies. and we did this in bra zim and came out with two very strong ideas. cbd, which is a buy rated stock and car sales. so those two angles are very, very good way to play the diet change. and for right now, where do you think the consumer demand is strongest across emerging markets? >> look -- >> i know that's a tough question. >> it's a tough question because we are in india. we're in central europe, we're in brazil. it depends how you play.

it depends in poland and in india, we choose the fertilizer companies because they are the best way to do it. in brazil, it was a little bit of the food producers and a little bit of the retail chain. we leave to the individual analysts to choose. >> and the disclosures for those names we've all mentioned? >> they are there. >> no business relationship? >> no business relationship. >> so nestle, can they turn it around from here, then? >> we're still neutral. i'll leave it to the analyst to come up with -- >> to further elaborate and call the bottom in that one, perhaps. thank you so much for your time this morning. straight ahead, we'll assess how the u.s. energy revolution is changing the global economy and how investors can benefit. we'll be right back. c8i?i?

welcome back 20 "worldwide exchange." i'm kelly evans and these they say are your headlines. stocks recovering from their worst performance in nine months. fear of falling demand for iphones and is ipads spreading to asia before shares of am suppliers tumble. voting on the next italian president voting getting under way in rome. but risks in the center left could jeopardize the process. a fire ignites an explosion at a fertilizer plant in texas. there are an estimated 100

injuries and it's been confirmed there are multiple fatalities. well, the dow is looking to add about 25 points at the open this morning. small rallies shaping up for the nasdaq and the s&p, as well. we know the nasdaq in particular was a weak link in particular. apple did fall below that $400 mark. it did knock down stocks across the globe, particularly in asia. its suppliers and tech stocks generally seen as exposed to the country's weakness after it was warned that revenue for that cup wasn't going to be that strong thanks to its one big customer, i.e., apple. the ftse cnbc global 300 just a little lower on the day. we'll look at european markets for that. we are rebounding a little bit after yesterday's weak session. the xetra dax downing 0.6%.

that's about a quarter of the move that we saw yesterday. indeed, eegan jones did come out and downgrade moody's in its annual statement reiterating the outlook for that country. the ftse 100, ftse mib are adding better than 0.8% for italy which is going through the process of selecting its next president. there is hope that at least this will help keep the country on track. moving to the bond's space span was just out with an auction. we saw healthy demand, low themes continue for the economy generally speaking in that it hasn't had trouble getting people to show up at these auctions for its debt yield. italy is well rallying, falling now to almost 4.2%. the key there would be interesting to see if we do fall

below that level. german bunds rising a little bit on those flows. here is a look at the foreign exchange market. euro/dollar, up about 0.1%. portugal saying this morning it will pred ahead with budget cuts to help meet its austerity measures this year. the australian dollar up about 0.28%. we've been watching mining stocks take it on the chin. the dollar/yen has been fluctuating between gains and losses. right now, adding 0.1%. how is this impacting trade in the markets? let's head back tout li sixuan. >> the shanghai composite up

marginal marginally. the hang seng extended a five-day losing streak, down 0.25%. the stand out loser today, australia with the asx 200 chalking up its biggest daily loss in a month. investors feeling jittery about global growth and appetite for industrial commodities and that sent bhp billiton and rio tinto shares down more than 4%. gold miner fortescue plunge d more than 7%. investors worry that the world isn't buying enough iphones and ipads. toshiba, which manufacturers iphone flash tips lost nearly 4% today. and south korea's lg display, which gets about 20% of its revenue from apple tanked nearly 5%. apple's top contractmaker shed

1.3% today while its first quarter sales fell 119% due to weak iphone demand. back to you. >> sixuan, thanks very much for that. now with the latest on boston, the fbi has criticized the media for misreporting that a suspect was arrested over monday's bombings of the boston marathon. the fbi issued a statement saying we're asking the media to exercise caution. they went on to see they had video of someone dropping a suspicious bag, but did not have more information yet. scott cohen is in boston with the latest. scott, good morning. so i guess the news then, despite the misreporting last night, remains there is no suspect in custody here. >> let's clear up what we know and what nbc news is hearing from law enforcement sources. here is what we do know.

there is an image, actually, multiple images according to law enforcement officials of an individual described to be a young man in a white or off white baseball cap who placed a bag near the site of the second explosion. they have him, as i said, on a number of different angles, most notably from the surveillance camera in front of the lord & taylor store, which is directly across the street. you can see on a google earth image where that would be in proximity to the second blast. there were multiple other surveillance cameras at the finish line at the boston marathon on monday as well as a great deal of mobile phone video, things like that, television cameras. they're compiling all of that and looking at it frame by frame. so far, they haven't distributed the image of that individual to the public. it's being distributed internally by the fbi to other law enforcement agencies, hoping to identify this person, presumably bring him into custody and at least question

him. it may be something, it may not be. a lot of people were putting bags down around the route of the finish line at the boston marathon, but this was remarkably close to where that second blast occurred. now, in addition to that, they have been compiling a great deal of physical evidence. we saw here in boston yesterday a swarm of evidence technicians and investigators going over boylston street where the attacks happened from top to bottom. from the ground up to the rooftops. we know they've recovered fragments of at least one of the bombs, possibly both of them, including the remnants of the pressure cooker that carried the bomb as well as a nylon knapsack or the like and some of the wiring, including some batteries that are typically used in toys. so these are household items readily available. that may make it tougher to figure out who did this, but they will look at that, the characteristics and obviously try and get in touch with this individual who they have on

video. kelly. >> scott, we'll leave it there for now. we know president obama is visiting the area. in the meantime, commodity prices are selling off. the sell-off i should say continues. it's mostly copper today, though. and we are certainly off the lows. in fact, something of a rebound shaping up now with gold up better than 1%. crude participating, as well. brent and nymex there both remaining below if you want to call them key psychological levels of $109 a barrel respectively. we've seen miners down significantly in some cases this morning. coming off the lows of the session. how do you play the commodities space? what other opportunities might the u.s. offer in particular here? darren joins me from yorkville capital. welcome. you're here to talk infrastructure, but the conference is about infrastructure, but what you're talking about, really, are some of the opportunities that the u.s. now offers, given a lot of

the big changes we've recently seen when it comes to shale gas. >> absolutely. i will start out with two questions for you today. what's the fastest growing energy producing country in the world? >> i'm going guess it's the u.s. >> correct, number one. we've grown our oil production by 2 million barrels in the last two months. it's incredible. we'll be energy independent by 2020 and by 2017 we'll be larger than saudi arabia. >> we've heard some of this chatter and there are people that say it sounds like a good story, but for infrastructure reasons it's not going to happen. why are you so convinced that this will happen? and what changes need to happen in order to basically be able to not only refine, but also distribute these fuels? >> that's the whole point. the second question i was going to ask, if texas is number one, which it is, what's number two? >> i would have thought north dakota is number one. >> well, it's number two. but that's incredible.

it has the lowest unemployment rate and it's the fastest growing state in the u.s. economy. why that? because of the shale play. shale has unleashed this incredible power in north dakota. but what that means to the u.s. over the next 20 years, it will require approximately over 300 billion. let's not get into round numbers. and that's a 400 billion market capitalization right now for massive limited partnerships. so this is an infrastructure asset class, which is essential. that's in growth mode. unlike many other infrastructure investments around the globe, you're investing for income. you're getting income from this investment, 6.2% in our product that we offered european investors, the liquid index. but you're also getting growth. historic over the past 12 years, you're seeing 12% income growth per annum.

we're the first one toes bring nlts that invest in u.s. energy infrastructure to europe. because it was taxably inefficient for europeans to gain investments to the asset class. so that's traded on the london stock exchange. >> europeans don't like tax efficiency. i should say european policymakers. >> right. everything about mlps, and it's a pass through vehicle like a reit, they will pay income taxes. if you think of it, western governments, whether it's the u.s. or western europe are broke. so they need to find a way to either rebuild aging infrastructure or in the u.s.'s case, define the development so

we become energy independent and are self-sustaining and not depend on western africa or the middle east for supplies. >> what about the skeptics who say 2% from here on out is too good to be true? >> think of it, the u.s. has been in this declining production development since the mid '80s. we're now in an upward slope development. it looks like the chief of production goals from unconventional shell plays, i think the environment going forward has never looked brighter for u.s. infrastructure. >> i think et was yesterday someone said nat gas is the new safe haven, suddenly this is start to go look a little more price afforded. any view on that? >> i think that dmodty prices, a broader view, i think that peak energy, we believe in just the opposite at yorkville. we think energy prices will probably be the growth driver of the global economy. it has a lot of implications.

it's very good for the u.s. and our consumers. it's very good for china. >> you say peak energy in terms of we're going to see declines -- >> i think we're going to see stability. the new energy supplies coming online are more expensive to extract from the ground, so you're not going to get back to $20 a barrel oil in our lifetime. but this $80 to $11 is 00, peaking at $120 dropping to $60 is probably a new range in the u.s. i see natural gas, it's at 350 right now, roughly, $4 to $6 range, $16 in japan, mid teen prices in germany. that's giving us a competitive advantage on the global scale from energy production. >> and would help bail out consumers, give them some much needed relief, as well. thank you so much for stopping by. >> thank you for having me. speaking of commodities, let's get more on this. >> geoff cutmore is out in

russia where this is a hot topic. >> it absolutely is. we have a fascinating panel. this is one of the more important companies in this space, glencore. he talked about what russia needs to do to encourage more foreign companies in their sector to come in and what they could also do to encourage more investment broadly into the resources space. he made the point that given the size of russia's resources, they could be doing quite a lot more that would generate revenue for the government and for the country. two things he sympathied out here, i don't think there will be many surprises on this, but interesting that he was making the point here. glencore has been reasonably successful in this space because of what he says is perseverance, given some of the challenges here. and the two things that he pulled out, there whats to be further progress on the rule of law and making sure that the owners of the resources, the buyers of those resources

actually get to exploit for their profits and for those risks. if the russian companies themselves are prepared to put money into the ground, then you will get the likes of angelo and bhp billiton and others on the international stage coming back into the russian marketplace and starting to put their money into this economy. so very interesting comments from ivan glasenberg. given that russia is quite dependent on revenue resources, very important topic for this summit and, obviously, we're seeing a lot of the prices at the moment falling here, which is going to have an impact going forward. so let me send it back to you on that point, kelly. >> geoff cutmore for us at the russian forum in moscow. coming up, we'll take a look at

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you're watching "worldwide exchange." these are your headlines. european stocks bouncing back,

but miners are still in the red. apple suppliers take a hit on fears about demand for iphones and ipads. and an explosion and fire at a fertilizer plant in west, texas, injuring more than 1 00 people. fatalities also confirmed. now, business leaders across the middle east are anxious that a high and growing young population could threaten future stability and lead to escalating unemployment. gamal aldean has more. >> absolutely. close to 60% of the arab world are under the age of 25 and that is the highest level globally according to the world bank. remember this was one of the themes that led to the turmoil that led to situations and the situation has hardly improved to this day. in some case webs it's even

deteriorated. i've spoken to several chief executives from the region. here is what they had to say on a scale of the problem and, b, whether the entrepreneurship can help resolve. >> we're in the region faced with a youth. it's a demographic time bomb that existed. we need to create over 150 million jobs over the next 20 years, which is more than the arab world has created over the last century. >> where i think the challenge is a lot of people now are talking about entrepreneurship as the solution to hiring a lot of people. in reality, that might be my own view. that's not necessarily the case. for a number of reasons. number one, it's very difficult to just create so many entrepreneurs. number two is our legal environment, to be honest with you, don't support that. >> remember there's a mismatch between the skills of people entering the labor market and

what the employers are looking for. a lot of nationals and the gulf cooperation council had the mind-set that government jobs offer better perks and better incentives. so there's a real paradigm shift that's happening. make sure you tune in tonight to access. we'll have a more comprehensive discussion and more chief executives we'll be talking to you. we'll see you then. >> grab the popcorn, take a seat and catch that show. straight ahead on this program, morgan stanley is reported first quarter earnings before the bell. analyst res expecting to swing to profitability. we'll preview those numbers when we come back. european markets are generally in the green. the stoxx europe 600 adding nearly 0.5%. we'll see if it can hold. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked.

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we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. something of a rebound shaping up in futures this morning. the nasdaq looking to add about 8 points, the dow adding 39 points. we know apple, i think it's about 90% of its business, so people very quickly drew their own conclusions there. again, it did affect trade across the globe. a lot of suppliers across asia were deeply in the red today.

how do you make money in these markets? here is what some of our guests have been telling us in the program this morning. >> look at inflation. inflation expectations over the last month or so, they dropped massively. that's why you have to be a buyer of bonds in emerging markets. >> people have chased down financial debt. i think there is a great weariness now because there's a realization that actually all is not well and we had that warning yesterday from the imf saying there are a lot of companies with a lot of countries that don't have sustainable debt. that is a realization that makes financial debt unattractive at the moment. >> we see some positive points on that part.

to 36% in equity is not a lot. we have a bit of overweight in japan and consumer discretionary. but apart from that, we are really cautious until the -- well, the result season is behind us. >> speaking of results season, morgan stanley does report ahead of the u.s. opening bell today. mary thompson is back at cnbc headquarters with a preview. we had goldman yesterday, morgan stanley today and i bet trading revenue in particular will be a focus. >> that certainly will be a focus. before i get to morgan stanley, i want to talk about american express, too. that financial giant reported after the bell yesterday. it reported disappointing results on the top line as cost controls boost the firm's profits. now, as expected, it's business, declining 6% in the first quarter. that was down, though, from the prior two earnings period. despite higher taxes for its affluent customer base, it saw little impact on their spending patterns. the firm has said in the past, spend sg more closely tied to

the earnings. it did see increase in corporate travel. revenue, though, is 7.9 billion was below $8 billion set analysts had forecast. as kelly mentioned earlier, later this morning, the last of the big banks reports its results. morgan stanley's first quarter profits seen rebountding from last year. changes tied to its earnings spread. earnings expected of $8.34 billion. like other banks, morgan stanley's trading revenue is seen down from last year's first quarter. investors will be paying particular attention to its income trading. it was certainly weak in the fourth quarter. given it does have approval from regulators, as well, to buy the rest of its joint business venture, citigroup wants to know when this will be completed and will look for any signs morgan may have made on its pretax goal

of 17% in that business. trading is going to be a focus for investors. it certainly was during goldman. back to you. >> and that report in just a couple hours' time. mary, thank you very much for that. we will preview the numbers and he'll say why he thinks you should be investing in the regional banks, instead. why? we'll be right back.

welcome back to "worldwide exchange." i'm kelly evans and these your headlines from around the world. a fire ignites an explosion at a fertilizer plant in texas. there are an estimated 100 injuries and the texas department of public safety confirms there are multiple fatalities. stocks in europe recovering from their worst day in nine months. basic resource shares are underperforming amid concerns. fear of falling demand for iphones and ipads are spreading to asia where shares of apple suppliers tumbled. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. a quick update on u.s. futures, we're still looking for about 40 points higher on the dow. the nasdaq and s&p up, as well. the nasdaq trying to recover losses after a sharp sell-off

warning on revenue that linked back to weaker demand potentially for apple's products. and that took down apple suppliers across the globe overnight. as for the european session, a bit of a rebous bound taking shape. that's only a little bit offsetting the sell-off yesterday that sent the dax down by more than 2% partly on concern or rumors about a potential downgrade. we did see eegan jones downgrade germany, but there was no further action on that front. also today, we're watching the italian presidential elections. the ftse mib joining the rally across the continent this morning. tragic news out of the u.s., more tragic news last night. a blast went off at a fertilizer plant in west texas. the department of public safety reports about a hundred injuries and multiple confirmed fatalities. significant damage wasrepor blocks away, including some 50 to 75 homes. the blast was reportedly heard more than 45 miles away. texas governor rick perry said the investigation is ongoing and

they're gathering information. federal officials have identified a suspect in the mailing of ricin laced letters to senators and president obama. they identify him as paul kevin curtis of mississippi. he was tied to the letters with his infamous signoff i'm k.c. and i approve this message which is apparently how he signs blog posts. and investigators say they have spot add suspect in monday's bombing for the boston marathon from reviewing security video to department store, though. and this is important, no arrests have been made. and this comes as president obama is heading to boston today to attend a memorial service for the bombing victims. scott cohen is in boston with the latest. he rejoins us now. scott, i understand mitt romney, as well, may be there. what kinds of security measures are taking place? >> well, there remains heavy security in and around boston,

kelly, in light of what happened this week. and, obviously, ahead of this visit. i should point out there is not a suspect as far as the authorities are concerned. certainly someone they are interested in talking to. you know, there is an interesting attitude here in boston now in the wake of all this. a sign on one of the buildings that i saw on the way over here that says boston doesn't blink. training for 2014 begins now. there's a lot of talk about resill cans, but also a lot of grief and that is all going to be brought together at the cathedral of the holy cross in downtown boston later today when there is an interface memorial service. president obama along with massachusetts governor duval patrick and boston mayor thomas menino are expected to speak. a number of dignitaries, including as you said mitt romney, the former massachusetts governor and long-time boston resident will be in attendance. now, on to the

investigation, in addition to what all is going on here as far as the memorial goes, it was a day yesterday of considerable breakthroughs. physical evidence that's been found at the sight of the blast includes parts of the bomb or bombs, parts of the black nylon bag or dark nylon bag that was used to contain the bombs as well as shrapnel and wiring from inside the bombs that made them go off and do such devastation. and there also is visual evidence and considerable visual evidence as you see in a google earth animation. one of the key surveillance cameras was apparently on the lord & taylor score strictly across the street from the second blast where authorities believe they got one of many angles of a man believed to be about six feet tall in a white or off white baseball cap who put down a bag around the second explosion. this may or may not be the

perpetrator of the attacks, but it is certainly somebody that authorities want to talk to. the picture itself is knot being distributed publicly yet. it's being distributed internally among law enforcement agencies to see who knows this person and clearly they'll look at things like cell phone records and things like that to pinpoint who this individual was. there looks to be a news conference yesterday. that was postponed at the last man. presumably it will happen today and part of the reason it was postponed is because there was a bomb threat unfounded at the courthouse which threw everything off. back to you. >> scott, thanks very much. we'll leave it there from the morning. now, we're turning our attention to the earnings day on wall street. there are a lot of companies reporting. before the bell, we'll get results from morgan stanley, pepsi, philip morris, united health, nokia and pea body energy. after the bell, it's google, ibm, microsoft, chipotle mexican

grill. analysts expect profitable 1yu678ing to 57 cents a share after posting a loss over the same period last year for morgan stanley. matt joins us now as a bit of a revi review. matt, people will always compare morgan to others. what's your own feel? >> i think they're very similar to goldman and goldman is one of the best fixed income trading houses on the street, kelly. and the logic is if they had difficulty, probably morgan stanley will, as well. i expect them to beat on earnings and be light on revenues. i think this is a difficult quarter and i expect more volatility for the money centered banks. i think it's worth taking profits in them right now. they've had a great run, take some risks off the table, especially as we're entering a period of seasonal volatility. you don't like the money banks. you like some of the regionals, instead? >> right.

the regionals are up on average, kelly, about 5% per use you year versus the money center banks, up around 11%. i think the money center banks are the quintessential risk on trade. it's our belief that europe still is not fixed. we'll have more bad news coming. these guys do not trade on multiples, they trade on momentum. and i think it behooves investors to take some profits, move to less riskier assets. it had better net interest income, net lower expenses. i think there will be better dividend growth. i think they know their customers better. they don't have the european exposure. i think those are the better plays right now. >> matt, stay there because we want to get back out to you in just a minute. first, though, we're going to turn our attention to russia. geoff cutmore is at the russia forum. no, he's not. geoff cutmore will be joining us from the russia forum very shortly. coming on "worldwide exchange," he'll be speaking to

herman gref amid concerns the russia economy is faltering. don't go anywhere.

we're seeing that rally up about 0.2%. we're up about 0.11% earlier in the session. a move higher, not aggressively so, however. germany's bundes tag approving that deal out of cyprus. if you're just joining us here on the program, these are your headlines. an explosion and fire at a fertilizer plant in texas, injuring more than a hundred people. fatality res confirmed. stocks rebounding in europe, but miners are in the red amid falling commodity prices. and apple suppliers take a hit on fears about demand for iphones and ipads. matt mcgormic is still with us. we were just talking about the break about banks liking the regional relative to the money-centered banks. we'll hear from morgan stanley with their results in just a couple hours of time. i'm curious at this point about

the housing market and the impact it has had on the regionals. that has helped rerate them significantly. do you want to get exposure to them here? >> i like the regional banks because, kelly, in some cases, they have a strong economic play. for example, one of the names we like is collin frost, cfr, a sample of space in texas. you have a back door energy play. house sg a way they can play that. with interest rates continuing to stay low, we think housing will continue to grow, but at a moderate pace. what i like is that they -- i like the regional banks for what they not. they don't seem to have the same risk exposure. they seem to know their clients better and more importantly for us, they have the ability to increase their dividends more. we think clients are going to really be focusing on income and down side protection. the money centered banks don't provide that in this environment.

>> what about some of the regulatory changes? i've heard people argue that jpmorgan would be doing amazingly well right now. i'm not sure that you buy that, but do you think there's a case for saying that regulation is holding back, is adding to the negative thesis that you may have for some of the bigger banks? >> there's no question that regulation is going to probably impact the money-centered banks more so than the regionals. if you look at dodd-frank, only about a third of the rules have been interpreted and no one that i talked to believes the other third will be acreeded to banks at all. they seem to have more money headlines than the regionals. when we talk to regional banks or money centered banks, none of them like the regulatory environment. but it appears the money centered have more of an issue with that. i think the regionals are a simpler model. the money centered banks seem to have issues upon issues upon issues.

look at bac yesterday, they had an increased reserve for more legal risk in the build up for reserve there. i like to buy companies that don't have legal risk as much as the money centers. >> and just to pivot more broadly to markets generally here, i should say, are you of the view that we're entering one of these spring-summer soft patches is in? is that part of the reason you don't like the proxy money centered banks offer? >> sure. i think when you look seasonally, kelly, the last couple of years, you've seen the markets sell off and become more volatile over the spring and summer months. it appears we're going through that right now. and i think when you look at those type of environments, whether it be those past couple of years or in the 30 to 70 of 2,000 dividend paying stockses, volatility increases. right now, their valuations increase. you have dividend income is now tax friendly. we think more people should focus on income in these uncertain times and dividends,

in our opinion, are the answer to volatility, which we believe are increasing. we're more bullish on dividend paying stocks than we are the broad market. >> we'll leave it there. matt, thanks for your time on all of that this morning. now, we're going to take quick break. when we come back, geoff cutmore will rejoin us from the russia forum. he'll be speaking with mark mobius with templeton market group. stay with us. welcome to the new new york state, where cutting taxes for families and businesses is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com

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arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. welcome back to the program. apple tumbled by a decline in sales of sirus logic.

apple is due to release quarterly results next week. there's concern that the numbers may be underwomening. that's spreading to asia. investors dumping iphone and ipad componentmakers. as you can see, almost 5%, better than 3% declines for those companies. apple's performance in china will be closely watched as earnings release. the group's first quarter revenues for china released 80% year on year. but as eunice yoon confirms, it's not just for those looking to expand in the country. >> this may look like an apple ad, but it's an expose. apple was recently targeted, accusing it as treating customers here as second class compared to others around the world, including americans. apple apologized, but the attack by the government-backed media raised concerns that beijing's

attitude towards companies is about to turn sour. >> a foreign company may be easier to go at than local. we've seen in it past. >> for decades, beijing courted companies from overseas. china got jobs, evenls got affordable goods. and but now firm res facing what they fear is a new reality. a tougher business climate in an important market. many worry about cyber espionage, new taxes and policies that seem to favor chinese brands, despite long time frustrations, the playing field here is far from fair. >> it's hard to compete with a government-backed entity. we've done pretty well doing that, i would say. >> do you think it's fair? >> i don't know if it's fair or not. it's china. >> not all the concerns are related to the government. yum brands, the fast food giant behind kfc was also blasted by the state press. but it failed to detect problems in its poultry supply. >> it's not perfect. we have learned a few things

this time. it's not about the legal department. it's just to say we should have and could have made it per text. >> president xi jinping says china must play fair. either way, international companies are looking to stay in the game. >> the market matters and that's why companies are here and that's why they take the effort to do the tough work that's necessary to grow their businesses here. >> amid a weaker, global economy. eunice yoon, cnbc, beijing. now, in a couple of other stories this morning, you could be paying more for your rare or vintage finds on ebay. the u.s. senate is set to vote on a bill that would force online retailers to collect sales tax on purchases made by out of state customers. we'll see how consumers respond. and there's a flashy ipo price.

tonight, seaworld entertainment will try for a $540 million ipo. it could be among the largest offerings of this year. the business behind shamu plans to buy some 40 million shares. half of the stock comes from blackrock which is the owner of sea world. now here is a trading update. we are seeing some interesting moves in gold and the euro and the yen at the moment. the european markets generally speaking are moving much higher. we're seeing the ibex 35 there to the far right in spain of 1.3%. the cac 40 nearly 1%. germany's xetra dax a little less and illustrate had a sharp sell-off better than 2% yesterday. nevertheless, not a downgrade coming as expected or at least as rumored, although eegan jones did make a move, but not one from the majors. here is a look at what's happening with u.s. futures, as well. looking about 6/0 points to the upside for the dow, similarly for the nasdaq and s&p 500. a separate portion of those gains. and it follows, of course, the

nasdaq selling off quite sharply on the back of that downward move in apple yesterday. here is a look again at what's on the agenda today in the u.s. at 8:30, we get, yes, initial jobless claims. and the minneapolis fed president is due to speak. and then at 10:00, leading indicators in the philly fed index are out. at noon, we'll hear from fed governor sara raskin. we've been following russia this morning because prime minister dimitry medvedev is defending his economic record amid fears that falling commodity prices could push the country into recession. this as president putin is stepping up pressure on his long time alley. geoff cutmore is at the russia forum which is happening right now in moscow and he joins us now. hi, geoff. >> yes, kelly, thank you very much indeed for that. i'm very pleased to have with me herman gref, the man who runs spur bank who has been kind enough to lay on this wonderful event for us. very nice to see you, herman. thanks very much for coming to our position here.

>> thank you. >> let me ask you a question. as we kick off this russia forum, some news coming out of the government, concerns about the growth rate going forward. how worried should international investors be about russia's growth rate this year and next? >> thank you very much for joining us forum. it's very important for us to get the right information about the russian economy. and the russian economy this year, not so fast like the previous and our forecast for this year is -- 4% growing and now we are changing our forecast between 2.8% to 3%. it's not bad. if you can see in the situation, the world economy wab it's not

bad situation. it's not good. it's not enough for the russian consideration -- russian government put the growth for themselves, for growing between 3% and 4%. this year. and if not so fast, predict the russian government. they think this situation in russia is not bad. >> what impact is that going to have on banking profitses, do you think? >> we don't change to our forecast for our net profits and for net profit of the banking sector for this year. our forecast for sberbank is 370 billion ruble. it's real in this situation and hopefully they can get it. >> obviously, we've been concerned about developments in

cyprus. i wonder if you would just give us a view on what you think happens now for cyprus and where the russian investors in cyprus should be worried. >> now we don't have worries about cyprus. they have a very bad situation, very bad news from this country. i think that this situation changed the opinion of all the russians just about convenient jurisdiction in this country. what i see with our customers, they are trying to change the jurisdiction and now is very important period of time in which country we can see the capital flow. in russia or in other european countries. >> mr. gref, thank you very much for giving us your time here. herman gref.

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good morning. a horrific explosion rock aes texas fertilizer plant. and on wall street, earnings and economic data tops today's agenda. it's thursday, february 18th, and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. and as joe